Legislative Update

May 22, 2009

MAFP Legislative Wrap Up

The 2009 legislative session ended on time, adjourning at 12:00 midnight on Monday, May 18.  However, unlike most budget years, they adjourned without passing a balanced budget.  Also unlike most years, Governor Pawlenty announced five days before adjournment that he did not intend to call the legislature back for a special session to finish the work; instead, he said he would balance the budget through line-item vetoes and using his statutory authority to unilaterally “unallot” funding at the start of the new fiscal year, July 1, 2009. 

As a reminder, the state was facing a $6.4 billion state budget deficit, offset by approximately $1.8 billion in federal stimulus money for a net deficit of $4.6 billion.  The disagreement between the Republican governor and the DFL-controlled legislature was over how much to cut spending and how much to raise taxes.  Pawlenty very clearly said he would support no new taxes.  His budget was balanced with a combination of large cuts and $1 billion of new revenues through borrowing with an appropriations bond.  The legislature reduced the size of the cuts, raised between $1.5- $2 billion of new taxes, and used accounting shifts of $1.8 billion.

Leading into the last few days of session, the Legislature had passed all their major spending bills.  They were anticipating vetoes of these bills because no agreement had been reached on the tax bill, and were expecting that the real negotiations with Pawlenty would start.  The Governor surprised everyone when he signed all of the budget bills with a handful of line-item vetoes of spending provisions.  DFL leaders were visibly flustered and had to scramble to determine their next move

In the end, there was no agreed-to budget package that Pawlenty would sign.  The result is that the budget is not balanced as constitutionally required; therefore the Governor will “unallot” in order to balance the budget.  This means the Governor may cancel state appropriations for programs, reduce payments further and even eliminate programs entirely in order to balance the budget until the legislature reconvenes in 2010.  He has said he will not call them back into special session so there will not be an opportunity to restore any cuts he makes as part of the unallotment process until next session.

Health care took a big hit in the signed Health and Human Services budget bill.  It is feared that additional cuts will come in anticipation of unallottment decisions.  Payments to hospitals, pharmacists, physicians and virtually all other health care providers were reduced in the omnibus budget bill signed by the Governor.  Family physicians and other primary care providers were spared most of these cuts.  Additionally, the Governor issued a line-item veto of funding for the General Assistance Medical Care (GAMC) program for low-income adults effective July 1, 2010.  In addition to the lives impacted by this cut, hospitals are reeling at the loss of reimbursement for services provided under this program.

Family physicians, and the patients you serve, will be impacted by many of the cuts from this year.  We were able to protect most services provided by family physicians from the 5 percent reimbursement cut.  We were also successful passing a primary offense seat belt law, requiring that all children under age 9 to ride in booster seats, defeating efforts to increase the 2 percent provider tax, supporting updates to the physician assistant licensing law, and maintaining funding for local public health grants.

Here is a brief summary of many of the bills that the MAFP was involved with this session. 

Bills that Passed

Eligibility Mostly Protected

As a result of the strings attached to the federal stimulus funds, the signed health and human services budget bill does not cut eligibility or benefits for children, nor most adults on state health care programs.  The budget the legislature passed protected all eligibility.  Governor Pawlenty, however, did eliminate the General Assistance Medical Care (GAMC) beginning July 1, 2010 with his line-item veto.  GAMC is a state-only funded program for single adults earning below $7,600.  Many of the approximately 35,000 enrollees who are expected to lose coverage have complex chronic conditions, in addition to mental illness and chemical dependency problems.

Reimbursement Cuts for Nearly All Providers

As part of the budget cuts included in the bill, there will be a 5 percent reduction to reimbursement for specialty physician services provided to enrollees of state health care programs (MinnesotaCare, GAMC and Medical Assistance).  Most family physicians will be spared from this cut.  In an attempt to recognize the already-low payment for primary care services, the cut does not apply to office or other outpatient visits, preventive medicine visits, and family planning visits billed by physicians, advanced practice nurses, physician assistants in the following primary care practices: general practice, general internal medicine, general pediatrics, geriatrics, and family medicine.

All other health care providers, including hospitals, pharmacists, personal care attendants, nursing homes, rehabilitative services and chiropractors, also received varying reimbursement cuts to help balance of the state budget.

In addition to the physician reimbursement cut, the final budget bill also delays payments by one-month from June 2011 to July 2011 order to shift expenses from services from this biennium into the next.  This delay is one of many accounting gimmicks the legislature used to balance the budget.

Preserved Public Health Investment

As part of last year’s health care reform legislation, the legislature created the Statewide Health Improvement Plan to provide matching grants to local communities to address obesity and tobacco use.  Governor Pawlenty recommended cutting the appropriation for these grants in half and spreading the remaining money over four years instead of two.  The legislature refused to cut this funding.  Unless the Governor unallots this item, there will be $47 million in grants scheduled to be distributed this summer.

Physician Assistant Licensure and Supervision

The legislature adopted changes in how physician assistants are regulated in Minnesota.  Physician assistant regulation will change from “registration” to “licensure.”  This will clarify the status of PAs in a number of related statutes that referred to “licensed providers.”  The bill also increases the number of PAs that a physician will now be allowed to supervise.  Previous law only allowed for supervision of two PAs by each physician.  This bill increases that to five PAs.  The MAFP supported these changes.

Primary Seatbelt Passes

After more than twenty years, physicians and law enforcement successfully passed a change to Minnesota’s seatbelt law that allows law enforcement to stop a driver who is not wearing a seat belt.  Currently, although the law requires drivers to wear a seatbelt, a driver can not be pulled over solely for failure to wear a seatbelt.  The new law, effective July 1, 2009, requires all passengers to be belted at all times and makes failure to wear a seatbelt a primary offense – consistent with all other transportation laws.

In other states that have passed a primary seatbelt law they have seen seatbelt compliance increase.  It is estimated that Minnesota’s compliance will increase from the current 84 percent to 95 percent.  This will greatly reduce the deaths and injuries resulting from vehicle crashes.

Booster Seats

Another traffic victory this session is the passage of the booster seat bill.  After more than six years of work, the legislature passed this important child passenger safety legislation. Beginning July 1, 2009, children up to age 8 (or 4’9” tall) must be in appropriate child restraints when riding in vehicles.  If pulled over, a fine may be waived if the driver produces evidence within 14 days that a booster seat has been purchased.

Autism Research and Recommendations

The health and human services budget bill requires the state to apply for stimulus funds available to expand research and treatment of autism spectrum disorders in conjunction with a Minnesota research institution.  It also creates a statewide Autism Spectrum Disorders Task Force.  The 15-member task force will include one representative each from the MAFP and the Minnesota Chapter of the American Academy of Pediatrics.  The task force is charged with making recommendations on ways to improve the coordination of services, increase the training available to providers, and identify sources of funding for services as well as ways to use that funding more effectively.

Health Plan Transparency Increased

The legislature passed legislation to shed light onto the reimbursement practices of health plans administering public programs (called PMAP).  Minnesota health plans have received 8 to 10 percent increases in payments each year in capitation payments to provide coverage through PMAP.  When legislators have attempted to find out whether these increases have been used for patient care, they have been told that that information is proprietary.  Physicians have long argued that these increased payments to the health plan companies are not being passed through as higher reimbursements.  The Department of Human Services will now be required to report information on the money trail and provide more transparency on where this money goes.

Standardized, Electronic Prior Authorization and Formulary Exception Forms

A number of items passed this year to help simplify the paperwork in your clinic including developing a standardized form for all health plans to use for prior authorization and formulary exceptions.  This provision requires the Administrative Uniformity Committee within the Health Department to develop a standard form to be used by all health plans in order to save clinics valuable time and money.

Non-Payment for Adverse Events and Errors

Public programs will no longer reimburse physicians for services that caused surgical errors which are reportable to the state.  Medicare already prohibits payment for hospital services when there is such an event, but Medicare is silent on physician services.  This provision, however, carried no fiscal savings because the Department of Human Services testified that they have no way to link physician services to hospital-based reportable events in their billing system.

Colon Cancer Coverage

Colorectal cancer is the third most common cancer and the second leading cause of cancer death in Minnesota, even though colorectal cancer is highly preventable. Unfortunately, only 39 percent of colorectal cancers are found at the earliest stage. That’s because lack of insurance status is a major barrier for many Minnesotans at risk of colorectal cancer.  Nearly 80 percent of uninsured Minnesotans who are at risk have not been screened.

The final health and human screening services budget bill includes $363,000 for colon cancer screen.  Even with an unprecedented budget deficit, lawmakers were convinced of the importance of this screening.

Imaging Prior Authorization

The high cost of diagnostic imaging continues to raise eyebrows at the capitol.  As legislators worked during this session to find ways to save money on public health care program benefits, they discussed prior authorization for diagnostic imaging for enrollees in Medical Assistance.  The final language was amended to allow the use of decision-support tools to satisfy the requirement, much in the same as is required by the private sector.  The provision applies to CT, MRI, MRA, PET, cardiac imaging and ultrasound diagnostic imaging, but does not apply to imaging services performed as part of a hospital emergency room visit, inpatient hospitalization, or if concurrent with or on the same day as an urgent care facility visit.
 

Bills that Did Not Pass

No Provider Tax Increase

As the budget situation looked more and more grim; there were rumblings of efforts to increase the provider tax to help balance the budget.  This was despite the fact that the Health Care Access Fund had an existing surplus.  Physician organizations including the MAFP expressed frustration over previous misuse of revenue from the provider tax and successfully opposed an increase in the tax on physician services.

Additionally, Governor Pawlenty proposed elimination of the Health Care Access Fund early in the budget process.  His plan was to transfer all HCAF revenue to the General Fund as another way to solve the deficit.  This was strongly opposed by physicians and the legislature and was not adopted as part of the final solution.  Maintaining a separate fund for the revenue raised by the provider tax remains critical to maintaining transparency over the use of these funds.

Health Care Home Mandatory Assignment Defeated

One attempt to squeeze additional savings from health care reform legislation passed in 2008 was a proposal to require all enrollees on state public programs (adults and children) with chronic conditions to select a primary care provider that is certified as a health care home.  While there is strong support for the implementation of health care homes, many expressed concern that it was premature to require enrollment in the health care home until the certification requirements for a health care home have been fully defined.  There was also a concern that the requirement to mandate public program recipients into health care homes could have created a disincentive for clinics to become certified as health care homes and sent mixed messages to patients. The proposal did not pass.

Dental Caries Prevention

The MAFP successfully mitigated efforts to mandate in law that all primary care providers do primary caries screening and fluoride varnish application as a part of all preventative and acute care visits or kids.  Although many family physicians are providing these services and can get reimbursed for them, the MAFP opposed mandating in law that these services be provided as part of each visit.

We were successful in amending the House version to remove the mandate and encourage more primary care providers to provide primary caries prevention.  Even with this improvement, no bill passed this session.

Also related to dental services, the legislature created of a new level of dental provider called a dental therapist.  This mid-level practitioner position passed into law as part of a compromise between the Minnesota Dental Association and community health care providers to address growing dental access problems, especially with low-income patients.  Dental therapists will practice under a collaborative arrangement with a dentist to perform primary prevention as well as minor procedures including filling cavities and simple extractions.

Newborn Screening Bill Stalls 

Efforts to pass legislation providing the Minnesota Department of Health with the tools they need to maintain a strong newborn screening program in the state were derailed by legislators who did not support the final compromise with the governor.  The compromise, while not perfect, was designed to ensure that all newborns received the screening program unless a parent objected to the test.

The bill would have increased the amount of information required to be given to parents, added additional options related to storage and use of dried specimens, as well as defined allowable research related to specimens after testing is completed.  It also would have required that all samples be destroyed after 25 months unless the Health Department received parental consent to keep the specimens longer.

We are terribly disappointed this bill did not pass after four years of working on this issue.  Privacy advocates continue to provide misleading information about the newborn screening program and the risk to patient privacy in an attempt to jeopardize this critical program.  With no change in the law, the testing will continue.  Clarification is needed soon, however, before opponents try to stop the entire program.

Standardized Tamper-Proof Rx Pads

A private vendor that prints tamper-proof prescription pads brought legislation to require all prescribers in Minnesota to use a single vendor for all prescription pads.  Their claim was that uniformity and the use of standard, sequentially numbered prescriptions would be an added safety precaution against theft of prescription pads.  The bill as amended by legislators would have required prescribers to purchase these pads.  Physicians raised concerns because the additional cost of the pads was not known.  Further, the provision sent mixed messages to prescribers who will be required to prescribe electronically in 2011.  In the end, the bill did not pass.

Required Second Opinion for ADHD Medications Does Not Pass

Another attempt to save state dollars on health care would have required a state-sponsored review of any diagnosis or prescription of ADD or ADHD medication for children under age five on state programs.  While a similar program saved Washington State nearly $1 million a number of years ago, DHS testified that there would be minimal savings because many ADHD medications are now available in generic form at lower costs since the Washington program began.  In the end, the proposal was not passed.

- Dave Renner, MAFP Legislative Representative
(drenner@mnmed.org, 612-362-3750, 1-800-342-5662)